Potential Finance Risks in 2012

Dec 26, 2011

In the final days of 2011, many investors are looking ahead, trying to determine what perils will threaten them in 2012. As The Washington Post reports, one of the biggest risks making the entire global economy vulnerable is the European debt crisis.

Over the next few months, investors will likely be bombarded with solicitations from eurozone governments and banks, according to Mario Draghi, the president of the European Central Bank, as quoted by the newspaper. With approximately $500 billion in outstanding bonds coming due in 2012's first calendar quarter, banks and governments will be rushing to refinance with additional loans, he said.

During his address to the European parliament, Draghi warned that 2012 would be a struggle for financial institutions. Investors will need to keep tabs on events unfolding at home, with the U.S. presidential elections gathering steam in 2012, as well as those happening beyond the borders, Patti Domm writes for CNBC.

The recent death of Kim Jong Il and succession of his son, Kim Jong Un, will add a new level of uncertainty to international relations, as do the mounting tensions between the U.S. and Iran. In Russia, it seems Prime Minister Vladimir Putin's grip on power is slipping. Widespread political demonstrations are also casting doubt on the hope that adopting IFRS would bring stability to the country's business environment.